Manufacturers across the nation are seeking action this year to boost U.S. competitiveness and cut back on unnecessary taxes that have been holding back manufacturers in the United States. In addition to the very important tax reform effort that is underway right now, the House Ways and Means Trade Subcommittee will begin to review tomorrow another vehicle to eliminate out-of-date distortive taxes on manufacturers through the so-called Miscellaneous Tariff Bill (MTB).
For years, the National Association of Manufacturers (NAM) has been a leading advocate in support of congressional passage of the MTB because the United States’ own tariff code is imposing anti-competitive costs on manufacturers in the United States. Since the last MTB expired at the end of 2012, manufacturers have paid billions of dollars in tariffs on products not even made in the United States to the detriment of American competitiveness and well-paying American jobs. Consider that in some cases, manufacturers in the United States are paying import taxes on components not produced domestically, while foreign producers bring their final products in duty-free. These and other historical distortions in the U.S. tariff code must be corrected to create a level playing field for manufacturers right here at home.
In 2016, the House and Senate, with near-unanimous bipartisan support, created a transparent, objective, predictable and regularized process for congressional review and consideration of the MTB through the American Manufacturing Competitiveness Act of 2016 (AMCA). Through that process, thousands of petitions were reviewed over the past year by the independent U.S. International Trade Commission (ITC) and other parts of the U.S. government, and the ITC put together a final report for Congress with petitions that it deemed to meet the requirements of the AMCA. The more than 1,800 petitions to remove import tariffs on products included in the ITC’s report would eliminate tariffs of more than $350 million in 2018 and more than $1 billion over the next three years.
Congress now has the opportunity to move forward on an MTB that would remove—for three years—anti-competitive border taxes on imports of products not produced or available in the United States. Consider the stories of two manufacturers:
- Albaugh specializes in the production and packaging of post-patent crop protection products, and employs around 350 workers across the United States. Albaugh’s products are used throughout the United States by farmers who require access to competitively priced alternatives for their crop protection needs. In the past, the MTB benefited Albaugh by reducing the cost of raw materials not available domestically and enabling the company to maintain and grow jobs at its headquarters in Ankeny, Iowa, a production facility in St. Joseph, Missouri, and other locations throughout the country.
- Glen Raven is one of the world’s leading manufacturers of performance fabrics used in the furniture, automotive, safety, marine and sunshade industries, with more than 2,000 employees in the United States. Since the raw materials required to manufacture many of these fabrics are not available in the United States, Glen Raven relies on the MTB to ensure that these materials can be sourced competitively. The expiration of the MTB in 2012 resulted in a significant increase in Glen Raven’s manufacturing costs, which made the company less competitive in the global marketplace.
Tomorrow, the House Ways and Means Trade Subcommittee will hear from three additional manufacturers—Gowan USA, Lasko Products LLC and W.L. Gore & Associates—about how the MTB will help them grow manufacturing in the United States. There are many more stories like this across America, including from many small and medium-sized manufacturers, in industries ranging from chemicals and textiles to electronics, agriculture and beyond, all of which will be able to improve their competitiveness and their ability to sustain and grow well-paying American jobs with MTB passage.
The NAM applauds the Ways and Means Trade Subcommittee for holding this hearing and looks forward to working closely with both the House and Senate to move forward MTB legislation as quickly as possible, so manufacturers can knock down another anti-competitive tax.
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